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This is what VCs mean when they talk about ‘you need to build moat.’
— VC Elizabeth Yin, co-founder of Hustle Fund
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Welcome back to Snippets! We made it to November 🍂
- Axios explores Meta's expanding AI portfolio, plus how those tools are being trained (hint: it rhymes with 'muser beta')
- In a separate case, South Korea fined Meta $15 million after wrapping up a four year investigation
- VC firms are beginning to focus on customer quality over quantity when investing in AI startups
- And so much more!
For those of you just joining us, Snippets is your TL;DR for what's happening at the intersection of privacy and tech.
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Meta’s user data collection has next to no limits
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Maura Losch/Axios
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Driven by the vast amounts of data collected on Facebook and Instagram, Meta has been quickly integrating AI tools into its product suite—raising new concerns about the company's largely unchecked data collection practices.
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- Meta's new AI features include personalized content in user feeds and AI-generated images—both aimed at increasing user time in-platform in order to maximize ad revenue.
- As one of the fastest-growing companies in the consumer AI sector, much of Meta's growth has been driven by its unrestricted use of publicly available data from Facebook and Instagram, including data from consumer-AI interactions.
- While users cannot opt out of their data being used to train Meta’s AI models, they can protect some data by deleting conversations with the Meta AI chatbot.
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💡 5 reasons industry leaders are reevaluating their consent management tools
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Consent management is, in many ways, Privacy 1.0. As one of the first pieces of privacy to have comprehensive legislation behind it (hello ePrivacy Directive), companies have been managing consumer consent through cookie banners for decades.
But with the rise of a sprawling ad tech ecosystem, a flood of comprehensive privacy laws across the globe, and the creation of new regulatory bodies—whose sole focus is on enforcing privacy laws—the stakes on consent management have changed.
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South Korea fines Meta $15 million for illegal data collection
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Lee Jung-hun/Yonhap via AP
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On Tuesday, South Korea’s data regulator fined Meta 21.6 billion won ($15 million) for sharing sensitive information about Facebook users, including their religious beliefs, political affiliation, and sexual orientation, with advertisers.
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- The regulator’s four-year investigation revealed Facebook had collected this data from about 980,000 users between 2018 and 2022, sharing it with 4,000 advertisers.
- Meta collected data by tracking user activity and ad interactions, categorizing users into specific groups to deliver personalized services—all without obtaining consent or clearly disclosing this practice in their privacy policy.
- The company was also found guilty of poor security practices, including failing to remove inactive pages and allowing hackers to exploit those pages to create fake identities.
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Ohio capitol confirms breach affecting 500,000 residents
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Joe Sohm/Visions of America/Universal Images Group / Getty Images
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Representatives of Ohio’s state capital, Columbus, confirmed that in July a “foreign cyber threat actor” hacked into the state network to access the personal information of over 500,000 city residents.
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- The compromised data includes residents’ names, dates of birth, addresses, financial information, Social Security numbers, and other identification documents.
- Despite state officials arguing they hindered the attack by taking the network offline, the hackers claim to have stolen 6.5 TB of data, including database access, employee log-ins, and servers used by the city’s emergency services.
- Mayor Andrew Ginther called the stolen data “corrupted” and “unusable,” but this statement was challenged by cybersecurity researcher, David Leroy Ross, who claims much of the data was published on the dark web.
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- FTC finalizes ‘click-to-cancel’ rule.
- Microsoft delays Recall rollout again.
- Class members object to Oracle’s $115-million settlement.
- Inside the Tor and Tails merger.
- Australia’s data regulator issues new AI guidance.
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Did Privacy Sandbox miss the mark?
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Google’s U-turn on deprecating third-party cookies has effectively killed the buzz around the would-be cookie alternative, Privacy Sandbox. But Mike O’Sullivan, the cofounder of a startup that collects metadata for adtech, wonders if Sandbox was ever worth the hype.
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- Data from O’Sullivan’s company, Sincera, shows that even at the peak of cookie deprecation discussions, ad publishers weren’t actively adopting Privacy Sandbox technologies like Protected Audiences (PAAPI) or the Topics API.
- PAAPI adoption peaked at 22% in March, dropping to 13.3% by August. Meanwhile, the Topics API hit a high of 41.2% in February before dropping to under 29% in September.
- The data also revealed that Privacy Sandbox’s technology was energy-intensive, potentially requiring double the network bandwidth and CPU power, which may have compromised user experience.
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AI firms looking to raise need quality customers, VCs say
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Barak Shrama/ Slava Blazer Photography / Flickr
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After a year of venture funding flowing to AI companies, VCs focused on seed stage startups are predicting a shift towards companies with higher quality customers and revenue streams.
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- The fundraising ecosystem has tightened since the pandemic, with 3,200 startups driven out of the market due to lack of funding—a trend that’s hit the fintech sector particularly hard.
- Corinne Riley, a partner at VC firm Greylock, said that raising a round in 2025 would come down to the quality of annual recurring revenue (ARR), customer retention, and total lifetime value.
- According to Riley, companies that land quality customers early, and then demonstrate growth within those accounts, have a better chance at securing funding—as it indicates repeatable revenue, rather than a market fad.
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🌟 Transcend welcomes Luke Arno as Chief Revenue Officer!
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We’re excited to announce the appointment of Luke Arno as Chief Revenue Officer (CRO) of Transcend. As CRO, Luke will support our mission of fixing privacy for the enterprise, informed by his experience leading global revenue functions at Twilio Segment and Box.
Luke takes the helm of Transcend’s revenue organization after the company posted another record-breaking quarter and year thus far, helping major Fortune 500 companies and high-growth category leaders mature their privacy management postures.
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Snippets is delivered to your inbox every Thursday morning by Transcend. We're the platform that helps companies put privacy on autopilot by making it easy to encode privacy across an entire tech stack. Learn more.
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